Aged Care in 2018 - 3 things you can't ignore

The needs, risks and challenges that impact on this vital sector require providers and those businesses supporting them to be at the top of their game in 2018.

Caring for our seniors carries great legal and moral responsibility. It also carries risk. Aged care facilities also have to manage the impact of regulatory change.

Being informed about the needs, risks and challenges is the first step to a proactive risk management plan towards a safe environment for residents, employees, visitors, volunteers, and contractors. It also helps protect your valuable assets.

Aged care providers are on the frontline in protecting the aged-care community. Increased awareness of their challenges in the coming year is a responsibility for businesses supporting them. Understanding the key issues and how best to overcome barriers will enforce greater risk management. It can also harness opportunities.

Needs

Did you know that the ability to maintain adequate staffing is the most important and immediate need for the aged care industry?

A social media post from Aged Care Crisis in a tweet from @agedcarecrisis in early December 2017 suggests that the need for adequately-trained staff in aged care is at a tipping point.

Rural providers are finding it especially hard to recruit registered nursing staff, at a time when staff retention is an issue in cities and regional areas.

But is this a modest example of the pressure on recruitment, and one that’s likely to intensify if palliative funding sees disruption after the next election? Kevin Mercer, CEO Aged & Community Care for Mercy Health sees the problem as a double edged sword.

“In metropolitan areas, we find the biggest challenge in retaining staff is that they do not live locally when compared to staff in rural areas. That’s why our commitment to workplace flexibility is so important in helping us to attract and retain talent. In such a competitive labour market, we are fully aware that candidates are interviewing us at the same time we are interviewing them. We also developed and implemented an online health and wellbeing hub in 2017 to support and encourage staff to be the very best version of themselves, which in turn translates to enhanced care delivery.”

At Mercy Health successful recruitment isn’t only about qualifications though. Mercer explains it’s also about individual motivation for the role.

“Currently 91 per cent of Mercy Health’s Personal Care Assistants have a Certificate III or Certificate IV in Individual Support (Ageing). We recruit staff who are not only qualified but are also passionate about providing person-centred care to residents every day. While we are committed to providing the required technical training, the people we recruit must have the right culture fit for our organisational values and model of care. This is a constant recruitment challenge but it is strictly non-negotiable. To achieve this, we have recently piloted a psychometric testing tool which forms part of our recruitment process.”

Despite efforts to achieve better recruitment results, some in the industry are forced to fill an urgent need for staff with casual roles.

“Mercy Health’s workforce comprises a mix of both permanent and casual staff, because we recognise the need to provide flexible and continuous care to meet resident care needs,” he says. “To support this workforce profile, we utilise an in-house casual bank. Our preference is not to utilise agency staff, therefore it is an absolute last resort to ensure resident care is not compromised.”

If the numbers proposed by Gamenz in her ABC report are accurate, then the drive towards migrant and young workers that she points to is an important step in the right direction for the industry. Most would agree that prevailing low pay and conditions remain a stark disincentive and need revision, and Mercy Health has already made strides in this direction by identifying some of the key drivers of performance.

“As a growing sector, attracting and retaining talent is a constant challenge. For the past nine consecutive years, Mercy Health has held the Workplace Gender Equality Agency (WGEA) Employer of Choice for Gender Equality citation. We recognise workplace flexibility is a key driver of employment decisions and job performance for men and women across Australia. A proactive approach towards flexibility provides us with a competitive advantage towards attracting, engaging and retaining top talent, both within and outside of the sector.”

According to a report by Emilie Gramenz for the ABC in 2017, Tasmania may have the fastest growth in demand for aged care and will need to fill positions for some 5,000 more workers over the next ten years.

Risks

Did you know that for all aged care providers, even if you have adequate staffing levels how you manage people in your organisation is critically important?

CCI’s 2017 Aged Care Risk Report identified people management as a top risk factor for providers, an issue occupying some attention at Mercy Health.

Methods used to ensure staff skill levels are adequate

“Critical to our workforce plan is the continual monitoring of our employee demographics as they tell us what sort of initiatives and programs we need to put in place to support our staff. For example, we are currently partnering with schools to provide opportunities for students to volunteer in our aged care homes. This is to expose them to the breadth of roles available in aged care.”

Focus on training is key to building a strong team; Mercer highlighting its important strategic investment that can pay dividends.

“There is a strong commitment to maintain and enhance the skills and knowledge base of employees through participation in management development and in-service training, self-directed learning, coaching, mentoring, as well as ensuring development needs are identified and met during annual performance and development reviews.”

This initiative has also meant tapping into a potential future work force, explains Mercer.

“For training and education to be effective, a key priority for us has also been to collaborate with Australian Catholic University.”

As more aged care and healthcare providers recognise the need to meet demand for skills, investing in people means changing the mindset of those charged with training and resources.

St. Vincent’s Hospital provides a comprehensive education program to help staff develop the cultural knowledge, skills and competence to be able to deliver culturally appropriate health care. Dealing with culturally and linguistically diverse backgrounds comes with the job more often today, and like Mercy Health, St Vincent’s Hospital in Melbourne now also has an established program that invests in people.

Tim Farren, CCI’s Health and Aged Care Segment Lead, sees the changes to the Aged Care Funding Instrument (ACFI) as another highly-rated emerging risk among aged care providers, and one that will fundamentally shift the competitive landscape, rattle business confidence, challenge business models, and see all major players facing greater financial volatility risks.

“It has catapulted the sector into unchartered territory,” he explains. “It requires providers to become part of a consumer-driven industry.”

“This is a multi-generational transformation in the aged care industry. The government is now providing packaged funding to the consumer directly instead of to the provider, and this means we are seeing the creation of a fluid market place of consumer directed care. The consumer can choose how to spend the money and no longer have services provided by one provider.”

Aged care, as a critical part of the overall healthcare sector, will effectively morph into a consumer industry that simply provides a product of healthcare/aged care services.

This raises a conundrum if we consider how hard it is already for providers to manage risk with a supply chain they are familiar with, let alone one they don’t know about. Farren urges providers to assess how prepared they really are by looking at their supply chain. “What is the impact to your business if your supply chain falls down? “

A third of the respondents in CCI’s 2017 Risk Report had reviewed their supply chains to see if they had a business continuity plan in place, the remaining two-thirds of respondents had not. Moreover, half of those in this sector working in Risk Management and the Board were not given training in governance. Can a provider feel confident housing residents after an emergency evacuation without the security of tried and tested suppliers to support business continuity? While some providers have measures in place in the event of disruption, many others do not.

Participants with a business continuity plan

“Mercy Health’s aged care homes always carry emergency supply stocks appropriate to their disaster recovery profile. We could also leverage off other homes’ stocks unaffected by the emergency,” says CEO Kevin Mercer. “Most of the essential supplies at our aged care homes are sourced locally or available locally. The homes are as vulnerable as the community in which they are located, in the event of a supply chain failure.” He sees other providers gaining awareness of their supply chain dependencies and the risks associated with it. “Yes, particularly for specialist areas such as pharmacy and continence products.”

A provider might be wise to rate their confidence in whether or not their suppliers have properly tested their own business continuity plans. CCI’s Tim Farren notes that of the aged care providers studied in the 2017 CCI Risk Report, two-thirds with a business continuity plan had not tested it for operational recovery following an interruption event. This should set off alarm bells in 2018 with businesses scrambling to get cyber security policies into place. At the end of 2017, less than half of the providers CCI assessed had one in place.

Participants with a cyber security policy in place

“I think providers are becoming more aware of the need for a business continuity plan, particularly in light of our exposure to natural disasters and extreme weather conditions, as well as our increasing reliance on technology to manage business critical functions. Recent cyber security threats affecting Australian businesses have focused the Mercy Health Boards and executive’s attention on how to prevent or mitigate the impact of an attack on the organisation’s information technology (IT) systems,” explains Mercer.

Cyber security policies are the hot topic in 2018, and it’s no wonder given businesses are still struggling with legacy IT systems and outdated disaster recovery plans. It’s a scenario that leaves providers increasingly vulnerable to risk. There are a number of things that providers can do to start the process of putting a plan into place, and for those already on the ball testing the plan’s effectiveness should be high on their security agenda.

Mercer says, “Mercy Health has a business continuity plan which contains a disaster recovery plan for its IT systems. The business continuity plan is reviewed with the executive team. Emergency drills and desktop exercises are also undertaken regularly to test the effectiveness of our response processes.”

Challenges

Did you know that looking beyond 2018 will determine whether aged care providers are really prepared?

CCI’s CEO Roberto Scenna, says “being tuned-in to the future needs of businesses in this sector means being informed about the emerging risks and changes that clients face.”

He advises a business to plan, test, and review.

“Commit your business to being informed and doing research before finalising a business continuity plan.”

He advises all sectors to monitor research and report on developments and trends to their stakeholders. As an aged care provider, it’s important to respond in ways that are innovative and strategic. As an insurer or supplier, it’s important to engage with aged care organisations and relevant industry bodies to share knowledge.

“Investing in shared knowledge through people will ensure the benefits of research become meaningful action, and ultimately it empowers those on the frontline in aged care services,” adds CCI’s Tim Farren.

Tim Farren notes that gathering insights and combining it with experience gained through shared industry knowledge not only aids the development of meaningful solutions, but can also harness opportunity.

“It’s the information advantage that presents opportunities, and that’s why we’ve developed CCI Insights. It’s an important place for clients to spend time online and become informed about the needs, risks, and challenges affecting their industry. Having that support is very important, and we can guide aged care providers through the process of implementing the right risk management solution for them.”

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Tim Farren

Tim is Head of Sales and Distribution with almost 30 years of sales expertise, and a keen eye for identifying business development opportunities. He served in roles at Arthur J. Gallagher and Ansvar, and brings international insurance acumen to CCI’s aged care, welfare, education, and the broader Christian market clients.